Isn't it funny, the amount of things like this that go on in the system we've created. Like how weird is it that "competition" - two companies both working on the same things against each other, without sharing what they know - can be better for the consumer than if both companies worked together. None of this is really going to change unless we can somehow make a world where making the world a truly better place can be a more powerful driver than money.
It isn't so weird when you remember that is how evolution works with biological creatures as well. If we all got together and tried to agree on the next singular mutation to our DNA, the whole thing just wouldn't work.
It seems to me like competing companies actually are incentivised to share information with each other. That would allow them both to cut costs. Does anyone know why they don't do this? Or know of examples where they do do this?
Of course competition would force them both to lower prices after they cut costs, but this will lead to increased demand so both companies should be making more profit. Also if they have a third competitior then they will both be gaining customers from them.
EDIT: Actually this happens all the time, just mediated by money. My economist brain switched off for a second. I was imagining a situation like "You tell us that trade secret in exchange for this one". But this situtation would require a "coincidence of wants". Money alleviates that problem. So this does happen all the time, it just looks more like "Even though you're our competitors we'll give you secret X in exchange for $n".
> Does anyone know why they don't do this? Or know of examples where they do do this?
Just about any capital-intensive industry cooperates. Your computer is made by any one of a few dozen companies; open it up and you'll see a bunch of parts made by suppliers. Open up a computer made by a competitor and you will see that most of the parts come from the very same suppliers.
The auto industry is both the same and different. I worked for an automotive electronics company in college. We'd get a binder full of specification in Japanese or German or French, translate it to English, and run the validation on the same part that went into a Ford or GM car, but with a few changes to the firmware to satisfy the differences in specifications. Most of the time, these things went out the door with no labels so the companies could put on their own.
Then there is collaboration between the automakers themselves. The new 10-speed transmission in Ford and GM trucks is a joint venture between the two. For decades, all automatic transmissions in BMWs came directly from GM. The new Mercedes Benz pickup truck is based on a Nissan. The upcoming Toyota Supra was joint developed with BMW. The new Diesel engines in Fords are co-developed with PSA. It goes on and on...
